Don’t take this the wrong way, but this made me bust out laughing…
When you hold stock, don’t you need to sell it/liquidate it in order to make money?
Boy, if that isn’t just a perfect example of the perversion of our economic system. “You can’t make ACTUAL money with it, you can only make money by participating the meta gambling game.”
No, stock entitles you to dividends, which is just a fancy way of saying “a share of the profits”. Like, a company brings in A amount of money (gross income) in a year, spends B of that on payroll and whatnot (expenses), maybe puts away C of that into a savings or spending account, and everything that’s left, D, gets given to the owners. If you have stock in the company, that’s you.
Of course, dividends are generally very small (like, think savings interest) compared to what you can make trading and speculating, so it’s never good enough for the rich.
It’s also rather common for companies to pay no dividends, because they just put all the leftover money into C. Which isn’t even necessarily bad, it’s generally built on the idea that keeping the money in the company will give the company more room for growth, I.E. raising the stock price, with the assumption that that will be worth more than the dividends may have been. But for so many companies, that just never ends. Sooner or later, the growth won’t be sustainable, and many companies just collapse under their own weight, leaving the stock worthless.
No need to be so condescending. I’m very financially literate and I had a similar question - because dividends are so small and rare nowadays that they just didn’t cross my mind.
Don’t take this the wrong way, but this made me bust out laughing…
Boy, if that isn’t just a perfect example of the perversion of our economic system. “You can’t make ACTUAL money with it, you can only make money by participating the meta gambling game.”
No, stock entitles you to dividends, which is just a fancy way of saying “a share of the profits”. Like, a company brings in A amount of money (gross income) in a year, spends B of that on payroll and whatnot (expenses), maybe puts away C of that into a savings or spending account, and everything that’s left, D, gets given to the owners. If you have stock in the company, that’s you.
Of course, dividends are generally very small (like, think savings interest) compared to what you can make trading and speculating, so it’s never good enough for the rich.
It’s also rather common for companies to pay no dividends, because they just put all the leftover money into C. Which isn’t even necessarily bad, it’s generally built on the idea that keeping the money in the company will give the company more room for growth, I.E. raising the stock price, with the assumption that that will be worth more than the dividends may have been. But for so many companies, that just never ends. Sooner or later, the growth won’t be sustainable, and many companies just collapse under their own weight, leaving the stock worthless.
No need to be so condescending. I’m very financially literate and I had a similar question - because dividends are so small and rare nowadays that they just didn’t cross my mind.